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Vinatex seeks more funds to take advantage of TPP
01
Mar '14
The Vietnam National Textile and Garment Group (Vinatex) has sought more funds in order to take full advantage of the benefits from the Trans-Pacific Partnership Agreement (TPP), expected to be signed in the first half of this year, reports Vietnam Plus.
 
In 2014, Vinatex has plans to invest in 57 projects, including 2 on farm cotton, 15 yarn, 8 weaving and 24 garment projects.
 
Of these, weaving and dyeing projects would require a large amount of capital, which would be slow to retrieve, while the Group’s charter capital is not adequate enough to meet the requirement, Vinatex said.
 
For Vinatex to take full advantage of the benefits from the TPP, investment in raw material projects is very important, according to the Group’s deputy general director Le Tien Truong. But, these projects are capital-intensive and also need a team of skilled workers. Hence, over the last two years, Vinatex mainly invested in garment and weaving projects.
 
By the end of June 2014, Vinatex is planning equitisation—the conversion of a state-owned enterprise in Vietnam into a public limited company or a corporation—which will increase the Group’s capital to 5 trillion dong (approx. US$ 235 million).
 
Post-equitisation, the Government’s share in Vinatex will reduce to 51 percent from the current 100 percent.
 
In view of the capital shortage being faced by the Group, especially to invest in yarn production and dyeing projects, Vinatex management has now appealed the Government to allow the Group’s enterprises to keep the capital raised through equitisation with them for five years to support their investment projects.
 
Vinatex has also urged the Government to lower land rent and modify environmental criteria to attract more investment in the country’s textile sector.
 

Fibre2fashion News Desk - India

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